Techniques Latest Update -

AIDA 182 Risk and Insurance Analysis Techniques Latest Update - Exam with Questions and 100% Verified Correct Answers Guaranteed A+ At First Attempt Verified By Professor

Accident-year method - CORRECT ANSWER: A method of organizing ratemaking

statistics that uses incurred losses for an accident year, which consist of all losses related to claims arising from accidents that occur during the year, and that estimates earned premiums by formulas from accounting records.

Advisory organization - CORRECT ANSWER: An independent organization that works

with and on behalf of insurers that purchase or subscribe to its services.

Allocated loss adjustment expense (ALAE) - CORRECT ANSWER: The expense an

insurer incurs to investigate, defend, and settle claims that are associated with a specific claim.

Average method - CORRECT ANSWER: A method to establish a case reserve by using

an average amount for specific categories of claims.

Balance sheet - CORRECT ANSWER: The financial statement that reports the assets, liabilities, and owners' equity of an organization as of 1 / 3

a specific date.

Bulk reserves - CORRECT ANSWER: Reserves established for the settlement of an

entire group of claims.

Calendar-year method - CORRECT ANSWER: A method of collecting ratemaking data

that estimates both earned premiums and incurred losses by formulas from accounting records.

Case reserve - CORRECT ANSWER: A loss reserve assigned to an individual claim.

Causality - CORRECT ANSWER: The relationship between two events, where the

second is brought about by the first

Conditional value at risk (CVaR) - CORRECT ANSWER: A technique to quantify the

likelihood of losing a specific dollar amount that exceeds the VaR threshold.

Consequences - CORRECT ANSWER: The effects, positive or negative, of an

occurrence

Correlation - CORRECT ANSWER: A relationship between variables

Covariance - CORRECT ANSWER: The relative association between variables to move

in tandem or independently of each other

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Credibility - CORRECT ANSWER: The level of confidence an actuary has in projected losses; increases as the number of exposure units increases.

Credit risk - CORRECT ANSWER: The risk that customers or other creditors will fail to make promised payments as they come due

Delphi technique - CORRECT ANSWER: A collaborative estimating strategy using

expert input to reach consensus by continuously refining individual responses.

Diversifiable risk - CORRECT ANSWER: A risk that affects only some individuals,

businesses, or small groups

Earnings at risk (EaR) - CORRECT ANSWER: A technique to assess earnings volatility by measuring the likelihood that earnings will be below a specific dollar amount over a specific period of time.

Empirical probability (a posteriori probability) - CORRECT ANSWER: A probability measure that is based on actual experience through historical data or from the observation of facts.

Expense provision - CORRECT ANSWER: The amount that is included in an insurance

rate to cover the insurer's expenses and that might include loss adjustment expenses but that excludes

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